Cognizant, which started life as the software arm of research firm Dun & Bradstreet, has always followed a hybrid model
For journalists of a certain vintage, this writer included, the Big Three of the IT services business in India have always been Infosys, Wipro and TCS.
Even in the 2000s, when Satyam Computer Services and HCL Technologies were on a roll, they never managed to threaten the position of the three. (To be sure, there were journalists who preferred the Big Four, with Satyam coming in fourth, and it wasn’t till the much-publicized fraud perpetrated by the company’s founder Ramalinga Raju that HCL managed to catch up with it).
There was a simple reason for this—the three (or the four) were well placed to benefit from work related to the Y2K bug (remember that?) and benefit they did, scaling up business at a rapid pace towards the end of the 1990s. The work they did gave them a head start as more companies in the US started outsourcing the development and maintenance of software applications in the early 2000s, a period when the US economy grew largely on the back of IT-led productivity gains.
Companies that came after them just couldn’t catch up – or so it seemed.
Until last week, when, for the first time, Cognizant Technology Solutions overtook Wipro in terms of quarterly revenue for the three months ended 30 June. It has been clear for at least a year or more now that this was imminent, but from a 15-year perspective, it is one of those things that could have never been predicted.
I’d like to view the development as the third of a series of changes that has reshaped the contours of the Indian IT services business. The first was Satyam’s collapse. And the second was TCS’ ascension to the role of the sector’s bellwether, a position that, until recently, had been occupied by Infosys.
A lot has been written about Cognizant’s numerical milestone (and a little on why it doesn’t really matter). This writer’s opinion is that it matters a lot for two reasons.
The first is that it proves beyond doubt that Cognizant’s hybrid model works.
For journalists of a certain vintage, this writer included, the Big Three of the IT services business in India have always been Infosys, Wipro and TCS.
Even in the 2000s, when Satyam Computer Services and HCL Technologies were on a roll, they never managed to threaten the position of the three. (To be sure, there were journalists who preferred the Big Four, with Satyam coming in fourth, and it wasn’t till the much-publicized fraud perpetrated by the company’s founder Ramalinga Raju that HCL managed to catch up with it).
There was a simple reason for this—the three (or the four) were well placed to benefit from work related to the Y2K bug (remember that?) and benefit they did, scaling up business at a rapid pace towards the end of the 1990s. The work they did gave them a head start as more companies in the US started outsourcing the development and maintenance of software applications in the early 2000s, a period when the US economy grew largely on the back of IT-led productivity gains.
Companies that came after them just couldn’t catch up – or so it seemed.
Until last week, when, for the first time, Cognizant Technology Solutions overtook Wipro in terms of quarterly revenue for the three months ended 30 June. It has been clear for at least a year or more now that this was imminent, but from a 15-year perspective, it is one of those things that could have never been predicted.
I’d like to view the development as the third of a series of changes that has reshaped the contours of the Indian IT services business. The first was Satyam’s collapse. And the second was TCS’ ascension to the role of the sector’s bellwether, a position that, until recently, had been occupied by Infosys.
A lot has been written about Cognizant’s numerical milestone (and a little on why it doesn’t really matter). This writer’s opinion is that it matters a lot for two reasons.
The first is that it proves beyond doubt that Cognizant’s hybrid model works.
